Tuesday, September 20, 2011

Distribution as Missing Link Between Local Crop Producers and the Market

Photo by talkingbiznews.com

The Ohio State University's Department of Agricultural, Environmental, and Development Economics posted an article titled, "Scaling-Up Connections Between Regional Ohio Specialty Crop Producers and Local Markets: Distribution as the Missing Link" that sites indirect marketing strategies as an important but often overlooked means of getting local food out to consumers. The article argues, "Many local food systems advocates focus on increasing the
number of farmers selling their products directly to consumers, but this type of
direct marketing is only one strategy for increasing the consumption of local
foods. Over 90 percent of all food for home consumption is acquired from retail
venues (such as grocery stores) (USDA, ERS, 2010), suggesting an important
strategy to increase the consumption of Ohio grown foods by Ohioans, is to focus
on increasing the flow of these foods through the state’s distribution and
retail market systems." Their research is a first step toward focusing on the barriers that currently exist between local food producers and their communities. While their report draws on information gathered within the state of Ohio, the implications of their findings can certainly be applied outside of the state, and can also be used as a foundation to identify the next steps in scaling-up the amount of specialty local foods that are widely provided to consumers.
Although many of the retailers interviewed expressed concern with the complexity of dealing with multiple local farms as opposed to established large vendors, they are also increasingly embracing the trend of preserving the identities of local farms offering products in their stores as a selling point. Additionally, "while food safety is a concern for all retailers, the larger retailers seek formalized certifications, especially those purchasing from large-scale farmers or companies not in close proximity. The greater physical and social distance from the actual producers creates the need for extra security, often achieved via third-party certification." Thus, local suppliers decrease the need for retailers to procure added security. Distributors also report that their transportation costs are significantly decreased by dealing locally. Overall, the findings suggest that, while building an efficient network between local growers and retails may be problematic to start, this alternative method is ultimately a viable and beneficial option.